U.S. prosecutors are seeking a three-year prison term for Changpeng Zhao, the founder and former chief executive of Binance, the largest cryptocurrency exchange in the world, after he pleaded guilty to charges related to money laundering.
The request was made in a filing on Tuesday night at a federal court in Seattle, United States.
The prosecutors argued that sentencing Zhao to double the maximum of 18 months recommended under federal guidelines would underscore the severity of his deliberate offenses and reinforce the importance of adhering to the law.
Instead, Zhao’s attorneys have proposed probation. U.S. District Judge Richard Jones is scheduled to sentence Zhao on April 30.
Zhao, once a prominent figure in the cryptocurrency industry, resigned from his position at Binance last November. At that time, he and the exchange acknowledged evading anti-money laundering laws as stipulated by the Bank Secrecy Act.
As part of an agreement, Binance consented to pay a $4.32 billion criminal penalty.
Prosecutors highlighted that Binance, through a “Wild West” approach, failed to report over 100,000 suspicious transactions involving designated terrorist organizations such as Hamas, al Qaeda, and ISIS.
Additionally, they noted that Zhao’s platform facilitated the sale of child sexual abuse materials and received a significant amount of ransomware payments.
Prosecutors stated, “He made a business decision that violating U.S. law was the best way to attract users, build his company, and line his pockets.”
In their plea for leniency, Zhao’s attorneys emphasized his status as a first-time offender, his unwavering acceptance of responsibility, the $50 million criminal fine he has paid, and the absence of prison sentences for similar cases in the past.
They also mentioned Zhao’s efforts to position Binance as a leader in compliance, “despite the initial failures that led to this prosecution.” Zhao founded Binance in 2017.
Zhao remains free on a $175 million bond and has agreed not to contest any sentence that falls within the federal guidelines.
The settlement with Binance includes a $1.81 billion criminal fine and $2.51 billion in restitution. Additionally, Zhao paid $50 million to the U.S. Commodity Futures Trading Commission, according to his attorneys.
